Hi there,
I own a block of land out right with my partner and about to commence the building of a house on it which we have loaned 100% of the house cost. We are going to live in this house for 12 months so we can get the first home owners grant, Then maybe thinking about renting it out and building another house or buying a cheap $200k – $250k rental investment which the rent will near cover the repayments of that mortgage / loan.
I'm wanting advice on which idea would be the better and why as I don't fully understand everything about investing yet eg…Taxes, Negative and Positive gearing,
Any advice would be much appreciated.
TMD What is it you are struggling to understand ?
I try and purchase everything for myself or my clients that is positively geared from day 1 but of course depending on your lvr this is not always possible.
In saying this remember there are non cash deductions especially on a new property that can aid your cash flow even though they don't cost you anything.
Of course that is not to say that buying new is always the way to go.
No reason if the loans are structured correctly (and assumuming serviceability allows) why you can build and buy your first IP at the same time.
Cheers
Yours in Financ
Richard Taylor | Australia's leading private lender
Sounds like you need to step back, pencil the options/scenarios and see which numbers stack up.
If you are going to convert the property you are building into an IP consider not paying down the principle against the property. Instead have a linked offset and accumulate your funds there (assuming you are not tempted into tapping into the funds).
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
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